Analyst: LNG won’t crash gas

Don’t count on a multitude of new liquefied natural gas import terminals and a flood of LNG collapsing domestic gas prices, said James Trifon, Wood Mackenzie’s managing consultant for North America LNG. Most of the import terminals planned won’t make it, and the underlying tight domestic supply situation will continue to support the market, he said in a preview of a presentation to be given at GasMart on March 18 in New Orleans (see http://www.gasmart.com/).

“There are people who think that LNG will be cheap and plentiful, but they tend to forget that there are other countries that it is heading toward; it’s not just a U.S. phenomena,” said Trifon in an interview with NGI.

He said power generators and industrial companies often think they will command a discount price when dealing with an LNG supplier. “(But) LNG is going to be sold based on the market price in whatever area you are bringing it in.”

Most of the LNG will be arriving under long-term agreements. Trifon also said that LNG terminal developers that have designed their business models around an LNG spot market may be in for a rude awakening.